- Price
- $27.32 → $27.87(+2.0%)
- Discount
- 21.9% → 20.4%(−1.6 pts)
- LSEG rating
- 2.21 → 2.15(−0.06)
- Thesis
- Copart trades at a discount because one large insurance customer moved its business to rival RB Global. The market fears that this is the start of a bigger shift and that the yard network is easier to switch away from than it looked. U.S. units fell 5.7% in the fourth quarter of fiscal 2026, and operating income fell faster than revenue. The change of CEO adds to the uncertainty: Jeff Liaw left on July 31, 2026, and Jay Adair, the previous CEO, returned. The $1.9 billion cash purchase of ACV Auctions adds integration risk. Copart expects ACV to have no effect on earnings per share in the first full year and to add to them from fiscal 2028. For the gap to close, U.S. insurance unit volume must become stable once the lost customer is in the comparison base, from early 2027. Copart said that without this one customer, its U.S. insurance assignments grew 2.3% in the fourth quarter, so other insurers must keep that growth. The U.S. antitrust waiting period for the ACV deal ended on October 13, 2026. The deal must alsonow close by the end of 2026 without a long antitrust review, and ACV must not add large losses. The next report, expected around November 19, 2026, shows the first quarter of volume under Adair. A clear answer on volume takes two to four quarters, to the fiscal 2027 results in September 2027.
- Risks
- A large insurance customer moved business to Copart's main competitor, RB Global, and the effect started to show in January 2026. Copart does not name the customer. If Copart keeps losing volume after this loss is in the comparison base, this was not one lost contract. It is a sign that the business is easier to switch away from than the moat rating assumes.
The ACV Auctions deal adds integration risk. ACV loses money today. Copart says that the deal will not add to earnings per share before fiscal year 2028. If regulators ask for more informationThe U.S. antitrust waiting period ended on October 13, 2026, so the main regulatory risk to the closing can move into 2027is gone. If the deal fails for antitrust reasons, Copart must pay ACV a fee of $115.3 million.
Costs grow faster than revenue now. In fiscal 2026, revenue grew 0.4% and operating income fell 2.6%. If this continues, profit keeps falling even while revenue grows.
Since October 2023, the U.S. Department of Justice has investigated Copart about anti-money-laundering controls. The fiscal 2026 annual report still describes this investigation.
- Checkpoints
- Oct 7, 2026: ACV tender offer expires after extension. Passed. Watch: A majority of ACV shares tendered by 5:00 p.m. ET passes; another extension because fewer than half of shares are tendered fails or delays the deal. Outcome: 52.84% of ACV shares were tendered, and Copart extended the offer to October 15 only to wait for the end of the antitrust waiting period.
Oct 13, 2026: US antitrust waiting period for ACV deal ends. PendingPassed. Watch: The waiting period ends without a second request from regulators passes; a second request, which delays closing into 2027, fails. Outcome: The waiting period ended at 11:59 p.m. ET on October 13, 2026, without a second request from regulators.
Oct 15, 2026: ACV tender offer expires after second extension. Pending. Watch: Copart accepts the tendered shares and the deal closes passes; another extension or a failed offer fails.
Nov 19, 2026 (estimate): Q1 FY2027 results: unit volume and operating margin. Pending. Watch: Stable US insurance unit volume outside the lost customer and a smaller fall in operating margin pass; wider volume loss or a further margin drop fails.
Dec 2026 (estimate): ACV Auctions acquisition closes. Pending. Watch: Closing by the end of calendar 2026 with a clear integration plan passes; a delay or a block by regulators fails.
Sep 2027 (estimate): Q4 FY2027 results after the customer loss is in the base. Pending. Watch: Year-over-year insurance unit volume that is flat or growing passes; continued volume loss after the lost contract laps fails.
- Recent events
- 2026-10-14: Copart said that the U.S. antitrust waiting period for its ACV Auctions deal ended at 11:59 p.m. ET on October 13, 2026. Regulators did not ask for more information. The tender offer still needs a majority of ACV shares tendered at its expiry, at 5:00 p.m. ET on October 15, 2026.
2026-10-08: Copart extended its tender offer for ACV Auctions a second time, to 5:00 p.m. ET on October 15, 2026. At the October 7 expiry, 52.84% of ACV shares were tendered, which is more than the majority the offer needs. The reason Copart gave for the extension is to let the U.S. antitrust waiting period end on October 13.
2026-10-01: Copart extended its tender offer for ACV Auctions to October 7, 2026. Copart withdrew and refiled its U.S. antitrust form on September 28 to give regulators more time. About 47.8% of ACV shares were tendered by September 30. ACV shareholders filed three lawsuits about the offer's disclosures in September.
2026-09-17: Copart began a tender offer, through subsidiary Apple Merger Sub, Inc., to buy all outstanding ACV Auctions shares for $10.50 per share in cash. The offer needs a majority of shares tendered and antitrust clearance. The deal has no financing condition and is expected to close by the end of calendar 2026.
2026-09-10: Copart reported Q4 FY2026 results. Revenue grew 2.4% to $1.15 billion. Operating income fell 10.6%, and the operating margin fell from 36.7% to 32.0%. Net income fell 17.4%. U.S. units fell 5.7%. Without the one lost insurance customer, U.S. insurance assignments grew 2.3%.
2026-09-10: Copart agreed to buy ACV Auctions for $1.9 billion in cash, a premium of about 45% to ACV's price on August 10, 2026. ACV runs a separate marketplace, where car dealers buy and sell used cars from each other. Copart expects no effect on earnings per share in the first full year, and a gain from fiscal 2028.
2026-07-08: Copart named Jane Pocock, the head of Copart UK, as President from August 1, 2026.
2026-06-29: Copart said that Jeff Liaw will step down as CEO on July 31, 2026, and that Jay Adair, the Executive Chairman and the previous CEO, will take the role again on that day. Liaw stays as a special advisor.